- The Washington Times - Wednesday, May 25, 2005

NEW YORK (AP) — Surging oil prices prompted new worries about the economy and sent stocks lower yesterday as investors locked in profits from the market’s recent rally. The concerns over oil overshadowed a strong report on manufacturing orders.

Crude futures rose sharply after the government reported a 1.6 million barrel drop in its oil inventories. The news created concerns about supply as the summer driving season begins. After rising as high as $51.60 a barrel during the session, crude futures settled at $50.98 a barrel, up $1.31, on the New York Mercantile Exchange.

The concerns over oil eclipsed a report from the Commerce Department that said orders for durable goods — big-ticket items designed to last at least three years — rose 1.9 percent in April, far more than the 1.5 percent analysts had expected. The report cheered investors worried about a slowdown in consumer demand.

The Dow Jones Industrial Average fell 45.88, or 0.44 percent, to 10,457.80.

Broader stock indicators also gave ground. The Standard & Poor’s 500 Index lost 4.06, or 0.34 percent, to 1,190.01, and the Nasdaq Composite Index dropped 11.50, or 0.56 percent, to 2,050.12.

Bond prices dropped after a strong buying spree dating to last week. The yield on the 10-year Treasury note rose to 4.07 percent from 4.03 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.

Dow component American International Group Inc. rose 28 cents to $54.08 despite media reports that New York Attorney General Eliot Spitzer was preparing a civil complaint against the embattled insurer. The complaint reportedly will charge that the company used improper accounting and lied to investors and regulators.

Titan Corp. added 36 cents to $22.18 on a report it was in talks to be acquired by fellow defense contractor L-3 Communications Inc., with a sale price in the mid-$20 per share range. L-3 lost $2.69 to $67.35.

Visteon Corp. said that its former parent company, Ford Motor Co., will take over 24 of Visteon’s auto parts manufacturing facilities in the United States and Mexico. The move is part of Visteon’s restructuring efforts. Visteon soared 14.4 percent, or 90 cents, to $7.17, while Ford slipped 2 cents to $9.96.

Energy company Calpine Corp. surged 33.3 percent, or 66 cents, to $2.64 after it announced an effort to cut $200 million in costs each year and reduce its debt load by $3 billion.

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